Published Feb 04, 2026 | 5:39 PM ⚊ Updated Feb 04, 2026 | 5:39 PM
The former minister demanded a comprehensive probe into KLSR, suspension of its operations pending investigation.
Synopsis: BRS Working President KT Rama Rao has accused Telangana Chief Minister A Revanth Reddy of enabling contracts worth nearly ₹6,000 crore to be awarded to an allegedly benami firm, KLSR, despite it being under insolvency, and has sought a CBI-led investigation. He further accused Revanth Reddy of staging a “political diversion” with the phone tapping case.
Bharat Rashtra Samithi (BRS) Working President KT Rama Rao (KTR) accused Telangana Chief Minister A Revanth Reddy of diverting thousands of crores of public funds to a benami company, KLSR, and of facilitating the award of major government contracts to the firm despite its insolvency.
Addressing a press conference in Hyderabad on Wednesday, 4 February, KTR said KLSR secured government projects worth nearly ₹6,000 crore under the present Congress government despite being under insolvency. The projects, he said, included works under the AMRUT scheme, the Jal Jeevan Mission, Young India Residential Schools, Telangana irrigation projects, and road development works.
He asked how a company under insolvency from 2023 onwards could be awarded large contracts between 2024 and 2026, particularly in the Municipal Administration Department and in the Chief Minister’s own Assembly constituency.
According to KTR, KLSR functioned as a front for the Chief Minister, and its association with Revanth Reddy was widely known in political and official circles.
The former minister demanded a comprehensive probe into KLSR, suspension of its operations pending investigation, blacklisting of the company, and cancellation of all contracts allegedly awarded without eligibility.
KTR said the Supreme Court had issued notices to the Telangana government seeking explanations for large-scale financial transactions involving KLSR, even though the company was under insolvency proceedings. The apex court, he said, also flagged allegations of attempts to influence judicial processes.
He questioned why the Chief Minister had allegedly failed to disclose the Supreme Court notices and sought clarity on Revanth Reddy’s alleged interest in the insolvent company.
In 2018, enforcement agencies raided KLSR, he said, while Income Tax raids were also carried out on 27 September on relatives of Revanth Reddy.
Those raids, according to KTR, uncovered transactions involving Sai Mourya Estates and KLSR, with funds from Bhopal Infra and Sai Mourya traced to accounts linked to the Chief Minister’s relatives.
KTR alleged that funds routed through KLSR were used to acquire large tracts of land and that enforcement agencies had earlier recovered evidence of these dealings.
Despite KLSR later entering insolvency proceedings before the National Company Law Tribunal (NCLT), KTR alleged that after assuming office as Chief Minister, Revanth Reddy enabled the award of major government contracts to the firm.
He said disputes between KLSR and another firm in July 2023 led both entities to approach the NCLT, after which KLSR filed a Corporate Insolvency Resolution Petition that restricted its financial transactions.
KTR further alleged that attempts were later made to pressure an NCLT judge through a senior judicial intermediary, leading the judge to recuse himself after placing the matter on record.
KTR claimed that Revanth Reddy was the “key force” working behind the scenes to secure favourable outcomes for KLSR.
According to KTR, the Supreme Court raised serious concerns over KLSR’s ability to furnish massive bank guarantees while allegedly lacking even ₹15 lakh to pay employees’ salaries. The court, he said, directed both the Centre and the State to investigate the inflow of hundreds of crores into the company.
KTR alleged that, fearing exposure, the Chief Minister staged a “political diversion” by announcing the formation of a Special Investigation Team (SIT) into phone-tapping cases involving BRS leaders, including T Harish Rao, J Santosh Rao, and former Chief Minister K Chandrashekar Rao, to shift public attention away from the Supreme Court notices.
He added that notices were issued seeking investigations by multiple agencies, including the Central Bureau of Investigation (CBI), the Serious Fraud Investigation Office (SFIO), and the Enforcement Directorate (ED).
According to KTR, instructions to run a “distraction campaign” were personally issued by the Chief Minister while at the World Economic Forum in Davos, Switzerland.
The BRS leader urged the State government to allow a CBI-led probe, as directed by the Supreme Court. Pending the inquiry, he demanded cancellation of all contracts awarded to KLSR, suspension of ongoing works, blacklisting of the company, and a comprehensive investigation by the ED and the SFIO.
Separately, he appealed to Union Minister G Kishan Reddy to press the Centre to ensure an impartial inquiry, saying that if the BJP was not shielding the Chief Minister, it must show sincerity by backing the probe.
(Edited by Dese Gowda)
